New business model will accelerate growth, strengthen market position and reduce costs by more than $2.0 million
DRUMMONDVILLE, QC, Feb. 11, 2014 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or "the Corporation") (TSX: CVT), a leading provider of construction and maintenance services to the public utility and heavy industrial markets, today announced the adoption of a new organizational structure that will increase operating efficiency and substantially reduce operating costs, as well as enhance and stimulate cross-selling initiatives.
In October 2013, the Corporation initiated an internal strategic review of its operations, with the primary aims of conducting an in-depth review of its business model and defining an action plan to implement the proposed initiatives in the best time frame possible.
Based on this action plan, the Corporation will adopt a simplified organizational structure allowing it to evolve from a business model resembling that of a holding company to a model based on fully integrated subsidiaries. Under this structure, operations will be regrouped by geographic region and the first step will consist in merging Thirau LLC and U.S. operations under the unified banner of Riggs Distler & Company, Inc. ("Riggs Distler").
To carry out the reorganization in the United States, the Corporation announces the appointment of Mr. Steve Zemaitatis Jr. as Executive Vice-President in charge of U.S. operations and President of Riggs Distler. Mr. Zemaitatis has been with Riggs Distler since 1998, joining CVTech in 2009 when the latter acquired Riggs Distler. This appointment takes effect immediately and Mr. Zemaitatis will report directly to André Laramée, President and Chief Executive Officer.
"CVTech's presence in the United States has grown substantially in recent years and the adoption of this business model will leverage the high-profile Riggs Distler brand to further enhance its position in the market for services to the energy industry. The reorganization will also make our U.S. operations more efficient and bring it a lasting competitive advantage," said Steve Zemaitatis Jr., Executive Vice-President, U.S. Operations of CVTech.
The new business model also entails the creation of shared administrative services, the introduction of new lines of business and access to more diversified expertise. The Corporation estimates that these initiatives will bring efficiency gains resulting in recurrent annual cost savings. These savings, mainly attributable to reductions in overhead costs and workforce, as well as expected synergy gains, will be progressively realized over the current fiscal year and, when completed, should reach more than $2.0 million on an annualized basis.
In Canada, the strategic review with regard to implementing the new Canadian business model is ongoing under the leadership of Bruno Testaert, Vice-President and General Manager of Thirau ltée and JJL Déboisement inc. Mr. Testaert was appointed last October.
"The execution of the action plan will raise CVTech's profile, extend its geographic reach to new markets, enhance its service offering and attract new talent. Even more important, these initiatives will create lasting value for our shareholders," concluded André Laramée.
OVERVIEW OF THE CORPORATION
CVTech is a company operating in the energy sector. The Corporation is a leading provider of construction and maintenance services to the public utility and heavy industrial markets mainly in Quebec, Ontario and the eastern United States. Through its subsidiaries, the Corporation provides maintenance and construction services for electricity transmission and distribution networks, substations and electrical power houses, as well as the control of vegetation on rights-of-way for electrical lines.
This document may contain forward-looking statements that reflect management's current expectations regarding future events. Forward-looking statements are based on a number of factors and include risks and uncertainties. Actual results may differ from forecast results. Management has no obligation beyond what is required under the law to update or revise forward-looking statements pursuant to new information or future events.
SOURCE: CVTECH GROUP INC.
For further information:
André Laramée, MBA
President and Chief Executive Officer
Mario Trahan, CPA, CMA
Chief Financial Officer
Martin Goulet, CFA